The last line instructs Vim with a number of editing settings. The most important one here is "ft=help", which says file-type is "help". So Vim will highlight things for us.

You can use *foo* to indicate an anchor to the "help" system of Vim. If you press Ctrl+] on a word "foo", the cursor will jump to the first *foo*. You can also see |foo| as a way to highlight it as implicit keywords.

This is not magic. The mechanism behind it is the tag system. Vim needs to have the following tag file to go to where you want it to go:

Each line defines a tag, the first element is the keyword, the second is the file where the tag belongs (yes, you can use multiple files as long as you know what they are), and the last element is the command which Vim has to perform at the keyword.

"{{{1" is the default folding mark for level one. You can use multiple level folders as well (:he Folding). Vim will folder the items automatically so you can get all items at one glance. Really nice feature!

I just integrated much of these functions (links, folding, etc) into one script in script#828.